What's wrong with the cigarette tax? It frees up more money for smart people

Mitt Romney gives his concession speech: He had a good point about the 47 percent who don't pay taxes. A big cigarette tax would help get some cash from that crowd..(AFP/Getty Images)

I was driving over to the Statehouse Monday listening to talk radio when the guy sitting in for Rush Limbaugh repeated that silly argument to the effect that "no tax is a good tax."

People like to say this. But then they immediately say the exact opposite. Sure enough, right after he finished saying that, the guy went on to state that the government does at least two things well: Wage wars and build roads.

In fact the federal government has done an abysmal job of waging wars for this entire century. That was lost on this guy. I didn't get his name but apparently he was one of those clueless "neo" conservatives from Hollywood.

As for building roads, though, the feds have quite an impressive record. Our Interstate highway system is one damned impressive road network. It beats the hell out of every other such network I've encountered - with the possible exception of the German autobahn.

But you can't build such a network without taxes. And the gas tax used to support those roads is not just a good tax but an excellent tax. For a little more than a penny a mile, I get access to a road network that will take me all the way across this great continent.

Without that tax, I wouldn't get out of my county. So it's just plain ignorant to assail the tax that funds roads that we all use every day.

That same sort of ignorance is behind the Reason Foundation's insistence that we should fund roads through tolls rather than the as tax. As I noted here, that pseudo-libertarian group is really just doing propaganda for the toll industry by pushing that nonsense. Tolls can easily cost 25 or even 50 times as much per mile as roads funded through the gas tax - and you still have to pay that gas tax.

Another excellent tax is the cigarette tax. The government has to fund itself in some manner. One way is to tax smart people by taking a percentage of the income they earn through their work, increasing the percentage the more they make.

As a conservative, I oppose such progressive taxation.

But if you oppose progressive taxation, as Reason pretends to do, then the alternative is regressive taxation. The cigarette tax is a perfect example. It actually collects more from the lower half of the economic spectrum than the upper half.

It penalizes stupid people - those dumb enough to smoke - and reward smart people who don't smoke.

Assuming you're smart, what's not to like?

Yet listen to this whiny weepfest from the Reason writer:

Cigarette taxes are extremely regressive. The poor pay a larger chunk of their income to the tax than the wealthy. This is further exacerbated by the fact that low-income, low-education and minority populations all smoke more than high-income, high-education and white populations, and by a good bit. Nearly a third of people below the poverty line smoke, while only 18% of those at or above the poverty line do. A tax on cigarettes is therefore paid mostly by society’s poorest individuals.

Sounds good to me. If those people are below the poverty line, they're no doubt getting big welfare and Medicaid payouts. I'm supposed to spring for both their cigarettes and the medical care they require because they smoke? If it were up to me, I'd tax these people to the limit - especially after as I look at the big tax bill I paid on Monday.

You can't whine about how the lower 47 percent pay no taxes, as Mitt Romney did, and then oppose one of the few taxes that could get some money from that crowd.

That makes no sense. It's progressive taxation that's bad, not regressive taxation. Or to put it another way:

"A sizable body of work in public finance suggests that consumption taxes are preferable to income taxes."

When you tax income, you're really taxing work (more on that here). And that's the last thing society wants to discourage. So if it you have to choose between a tax on income and a tax on cigarettes, there's no choice - not for a conservative anyway.

Let the liberals - and the lobbyists disguised as think-tankers - wring their hands about the effect on the poor. If the poor are so damned poor, how can they afford cigarettes?